NEWS

IRS Sets 2018 HSA Contribution Limits

Health savings account caps rise $50 for self-only plans, $150 for family coverage

The amount that individuals may contribute annually to their health savings accounts (HSAs) for self-only coverage will rise by $50 next year. For HSAs linked to family coverage, the contribution cap will rise by $150.\r\n\r\nIn Revenue Procedure 2017-37, issued May 4, the IRS provided the inflation-adjusted HSA contribution limits effective for calendar year 2018, along with minimum deductible and maximum out-of-pocket expenses for the high-deductible health plans (HDHPs) that HSAs must be coupled with. These rate changes reflect cost-of-living adjustments, if any, and rounding rules under Internal Revenue Code Section 223.\r\n\r\n\"The contribution limits for various tax advantaged accounts for the following year are usually announced in the fall, except for HSAs, which come out in the spring,\" explained Harry Sit, CEBS, who edits The Financial Buff blog. Due to a mild uptick in inflation and rounding rules, the 2018 HSA limit will have small increases, he noted.\r\n\r\n\"Employers should consider these limits when planning for the 2018 benefit plan year and should review plan communications to ensure that the appropriate limits are reflected,\" advised Damian A. Myers, a labor and employee benefits attorney with Proskauer in Washington, D.C.